Why multi-national companies love the EU

And why EU countries export their unemployed to the UK

Yesterday the EU’s official statistics agency released its latest figures for minimum wages across the EU effective in 2019.

Brexit Facts4EU.org Summary

No minimum wage in the EU

  • 6 Member states have no legal minimum wage at all
  • Lowest minimum wage : Bulgaria (€286)
  • Highest minimum wage : Luxembourg (€2,071)
  • UK : €1,453
  • The highest minimum wage in the EU is more than 7 times higher than the lowest

EU minimum wages 2019

© Brexit Facts4EU.Org 2019

These “workers’ rights” are set by individual countries, not by the EU

Despite what readers will hear regularly in Parliament about the importance of ensuring workers’ rights after Brexit, there is no EU obligation for member states to apply a statutory minimum wage.

Indeed 6 member states have no statutory minimum wage at all. These are the countries of Denmark, Italy, Cyprus, Austria, Finland and Sweden.

The wage gap across the EU

Of the remaining 22 member states which do have a statutory minimum, the gap between the lowest (Bulgaria: €286) and the highest (Luxembourg: €2,071) is enormous, even after accounting for the lower cost of living in Bulgaria.

A Bulgarian working in the UK in a minimum wage job will receive over five times what he or she would receive back home.

Multinational companies cashing in

For large firms in the EU which have need of a large, low-skilled workforce, it is clear that the EU offers the opportunity to place their facilities in countries where annual wage costs will be significantly lower. Because of the Single Market and Customs Union, they are then able to export their goods anywhere in the EU, with no penalties from tariffs being applied.

Exporting unemployment

The latest data we have from the Office for National Statistics (ONS) shows that there are 3.7 million EU nationals resident in the UK. This comes from the ONS report of November 2018.

Please note two things: firstly that the figure quoted by politicians is usually 3 million which is clearly understated, and secondly it is widely believed that the number of EU nationals in the UK is much higher than reported, as the method of counting them is incomplete to say the least. Brexit Facts4EU.Org has previously published detailed research of the issuance of National Insurance numbers, which suggests a far higher number.

When looking at the minimum wage data above, it is perhaps not surprising that the ONS reports that :-

“The increase in non-UK populations in the last few years has been largely accounted for by EU populations, particularly the EU2 [Bulgaria and Romania], with those born in Romania, or with Romanian nationality, seeing the largest increases.”

Unemployment in the EU

Regardless of minimum wage levels, it is a simple fact that unemployment in the EU remains stubbornly higher than in the UK. Indeed in many EU countries it is several orders of magnitude higher, and youth unemployment in particular is much higher.

Observations

Jeremy Corbyn constantly drones on about protecting “EU” workers’ rights. We wonder if he knows the facts?

Above we have shown that there is no EU statutory minimum wage. Not only that, but there is no EU requirement for member states even to have one of their own.

Furthermore, the disparity in the statutory mimum wage for those EU countries which have a statutory minimum wage is huge, with the highest being seven times the lowest.

If nothing else, this creates a draw for multinationals to site their production facilities in ‘cheap’ EU countries, and a draw for EU nationals to come to the UK to benefit from higher wages, better state benefits, and to escape unemployment in their own countries.

We would suggest that you don’t have to be an economist to realise that all of this has had a negative impact on the standard of living for the British workers whom Jeremy Corbyn is supposed to be speaking for.

Being party-neutral we merely wish our politicians to know the facts before they open their mouths.

01 Feb 2019

Sources: [ Official EU Eurostat data, 31 Jan 2019 | ONS ]

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